Mortgage Choice Act of 2013

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5461) to clarify the application of certain leverage and risk-based requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, to improve upon the definitions provided for points and fees in connection with a mortgage transaction, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days with which to revise and extend their remarks and submit extraneous materials for the Record on H.R. 5461 currently under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of H.R. 5461, a bill authored by the gentleman from Kentucky (Mr. Barr), my colleague on the Financial Services Committee, and cosponsored by Mr. Gary G. Miller of California and myself.

This bill contains four titles, three of which having already passed this House with overwhelming or unanimous support and one of which passed with only a dozen ``no'' votes.

Mr. Speaker, it is rare that the Senate sends us meaningful legislation; and, frankly, it is even rarer when they send us legislation that amends and fixes the Dodd-Frank Act. As we on the Financial Services Committee have seen in our hearings and our markups, our friends on the other side of the aisle and the other side of the Capitol usually defend Dodd-Frank to the hilt, bestowing on it deference normally reserved for the sacred texts handed down from the heavens.

Well, we should agree that Congress doesn't always get it right. When sweeping legislation is enacted--remember, Dodd-Frank is a 2,300-page bill--there are often areas that later need clarification, and that is exactly what we are talking about here today.

Whatever one's position is on Dodd-Frank, we should all be able to agree that the text is not sacred and does need some fixing. That is why I am pleased that the Senate has sent us a bill to clarify that regulators should not impose regulatory capital requirements designed for banking institutions on insurance companies. That was not what was intended.

The Senate bill, S. 2270, passed the other body unanimously. There is broad support in the House for a companion measure, but there is equally broad support for three other Dodd-Frank technical correction amendments that have previously passed this House: Mr. Barr's bill on the treatment of collateralized loan obligations under the Volcker rule, Mr. Grimm's bill to exempt end users from derivatives from Dodd- Frank's overreaching margin requirements, and my own bill on how points and fees are treated under Dodd-Frank's onerous qualified mortgage rule.

My legislation that is included in this package is a strong bipartisan provision that modifies and clarifies the way points and fees in a real estate transaction are calculated. This provision is narrowly focused to promote access to affordable mortgage credit without overturning the important consumer protections and sound underwriting requirements that Dodd-Frank's ability to repay provisions has in place.

Homeownership has been a pillar of American life for generations, and this particular provision will help more Americans realize this portion of the American Dream.

This bill is a commonsense measure that should and, I believe, does have broad bipartisan support. I was puzzled, however, by a Dear Colleague letter produced by Ranking Member Waters circulated earlier today. In the letter, she writes that Mr. Barr has coupled the insurance capital bill with other ``divisive legislation.''

Now, I would ask my friend the ranking member: What divisive legislation are you referring to? Is it the CLO bill which passed the House on voice vote? Is it the end user bill which passed the House on the ranking member's ``yes'' vote herself and only a dozen ``nay'' votes? Or is it my bill that also passed the House by voice vote? I don't see the divisiveness, and I don't see where the problem is.

The reality is Americans don't care about the parliamentary process so much as they want results.

We are pleased that the Senate has finally come to the table on Dodd- Frank reforms. This is legislation that represents a step forward in working with the other body to make sure that my constituents and your constituents can get mortgages to buy their first home, that farmers can assess the financing that they need to buy tractors and work their land, and that Americans can buy insurance policies without severe premium increases.

I encourage my colleagues to support H.R. 5461, especially my Democrats friends who I believe support every component of the package.

I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I wish I had actually asked if the gentlewoman would yield because I am confused. I am confused on a bill that she has voted three times--I am positive--three different bills, how that is divisive, how it is not targeted with significant Democrat support.

I personally with one of these bills--my bill has been sitting in the Senate since June. It has been targeted, it has had Democrat support, and it has had Republican support. We simply cannot get the Senate to move, and I am not sure why my colleague would support a Senate bill without any House input, but not expect the Senate to look at our material and to look at our bills.

Mr. Speaker, with that, I yield now as much time as he may consume to the gentleman from Kentucky (Mr. Barr) the author of this legislation.

Mr. Speaker, I yield an additional 30 seconds to my colleague from Kentucky (Mr. Barr), who would like to clarify.

Mr. Speaker, I yield myself such time as I may consume.

I am curious why we are here. The House of Representatives is only going to pass Senate bills. I am curious why my colleagues would be willing to do that. I would love to hear from my colleagues, which overwhelmingly passed House bill does the Senate object to? We simply cannot get them to take our bills up.

I am glad to hear that my colleague, Mrs. McCarthy, is going to be supporting this bill package. I too am hopeful. But I do believe that this is not political theater, for the robust list of supporters, like credit unions, banks, insurers of all sizes, the entire real estate community and end-users strongly support the policies that are within this bill. And I do have that list available as well, which I will include for the Record.

So, Mr. Speaker, I am prepared to close, and with that, I reserve the balance of my time.

September 15, 2014.

Dear Members of Congress: The undersigned trade

associations, representing job creators across the country of

all shapes and sizes, write to urge your support for

bipartisan legislation recently introduced by Reps. Andy Barr

(R-KY), Gary Miller (R-CA), Bill Huizenga (R-MI), and David

Scott (D-GA). H.R. 5461, currently scheduled for floor

consideration on Monday, September 15th, includes important

technical corrections to the Dodd-Frank Wall Street Reform

and Consumer Protection Act that strengthen the underlying

Act and provide critical clarifications to better oversee our

financial system while allowing for economic growth.

The ongoing implementation of the Dodd-Frank Act has

revealed unintended consequences that have adversely impacted

job creation and economic growth. We believe that the Barr-

Miller bill, comprised of a series of noncontroversial,

thoroughly examined, bipartisan proposals will fix these

unintended consequences and help make financial reform more

workable and effective. Specifically, this legislation

contains the text of three bills previously approved by the

House (H.R. 634, the Business Risk Mitigation and Price

Stabilization Act; H.R. 3211, the Mortgage Choice Act; H.R.

4167, the Restoring Proven Financing for American Employers

Act) as well as one bill that recently passed the Senate (S.

2270, the Insurance Capital Standards Clarification Act) by

unanimous consent. In fact, three of the four titles of this

package have previously passed either the House or Senate

without one dissenting vote.

We urge your support for the Barr-Miller-Huizenga-Scott

bill to help foster job creation and economic growth.

Signed,

American Bankers Association; American Bankers Insurance

Association (ABIA); American Financial Services Association;

American Insurance Association; Consumer Bankers Association;

Consumer Mortgage Coalition; Community Mortgage Lenders of

America; Credit Union National Association; The Financial

Services Roundtable; The Financial Services Forum;

Independent Community Bankers of America; Leading Builders of

America; The Loan Syndications and

Trading Association; Mortgage Bankers Association; National

Association of Federal Credit Unions; National Association of

Home Builders; National Association of Mutual Insurance

Companies; National Association of Realtors; The Realty

Alliance; Real Estate Services Providers Council, Inc.

(RESPRO); Securities Industry and Financial Markets

Association; U.S. Chamber of Commerce.

Mr. Speaker, I am prepared to close, Mr. Speaker, and reserve the balance of my time.

Mr. Speaker, again, I am prepared to close, and I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I will address my remarks to the Chair, but, again, this is not about parliamentary procedure. This is about results.

The only bill that we will see here that may bring confusion to this entire process is the one that my colleagues are advocating for, the Senate bill. It is the only bill that we haven't dealt with in committee. It is the only bill we haven't had a vote on in the Houses. The other three bills have passed, two of them unanimously by voice vote, and the other one had 12 people, out of a body of 435, vote against it. Sounds like it is overwhelming. If it is that confusing to my colleagues to figure out what bill and how they voted for it when they come to the floor to vote on this package, they maybe should reconsider their current line of work. This should not be that tough.

This is, again, something that we need to move forward on. The political theater that seems to be happening here is on the other side. I am not sure why, if it is about trying to play to a base for an election issue or what, but this is the one time I think in the history of my working career that the whole is worse than the sum of its parts. This doesn't make any sense.

So there has not been bipartisan work on the underlying bill, Dodd- Frank, which I might remind my colleagues passed with zero minority Republican votes when the bill was passed. This package of bills has passed with overwhelming bipartisan support. I applaud my colleagues on the other side of the aisle when they oppose the Senate.

And I guess I needed to clarify that my comments about people acting like this is holy writ from the heavens does tend to be concentrated with my colleagues over in the Senate who apparently don't want to touch this or others in the administration who oppose the nine-bill package on derivatives reform that passed overwhelmingly bipartisanly out of our committee as well.

That is the kind of holdup that we have that is frustrating Americans, that is frustrating me as a policymaker and my colleagues, that is frustrating, frankly, future generations as they look in on this process.

It is time, Mr. Speaker, to pass this package of bills that includes three bills that this House has already dealt

with, that the Senate should have absolutely no opposition to or excuse why they will not take up.

With that, I again ask my colleagues to pass this particular bill, H.R. 5461, and look forward to its passage here soon.

I yield back the balance of my time.

Mr. Speaker, as I stated during the hearing and the mark up on The Mortgage Choice Act of 2013 (H.R. 3211), there are serious concerns about steering consumers into buying title insurance with hidden commissions and inflated costs.

I bought two homes in my life. Like most homebuyers, I was asked to sign a bunch of papers with lots of fees such as origination charges, appraisal fees, scoring fees, recording charges, tax service fee and title insurance. Like most consumers, I chose my title insurance provider based on referral: I did not comparison shop.

For most of us, title insurance is the most expensive of the closing cost fees--sometimes running in the thousands of dollars. These fees are poorly understood by homebuyers. This can lead to paying higher fees than is necessary or appropriate.

When Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, we required the newly created Consumer Financial Protection Bureau (CFPB) to do a better job at protecting consumers when buying a home.

We know that the housing finance system had too much predatory and discriminatory lending. African Americans and Latinos were frequently charged much higher interest rates than they qualified for. Homeowners were refinanced into high fee and interest rates they could not afford. The result was more than five million foreclosures and a colossal loss of wealth.

In response to the new law, the CFPB wrote rules to protect people buying homes from products which would strip their wealth. One of those rules defined a Qualified Mortgage (QM) standard which was established in Dodd-Frank. As part of that QM standard, the CFPB established a ``points and fees'' bright line limit for mortgages that qualified under the Ability to Repay provision.

The CFPB established a limit on ``points and fees''--which account for a loan's origination costs--that exceed 3 percent of the loan amount--although it can be up to 8 percent for lower cost homes. Because of concerns that the affiliated title insurance system was leading to higher costs for borrowers in a market based on reverse competition, the CFPB wisely chose to require title insurance charges from affiliated title agents be within the points and fees cap.

H.R. 3211 reverses the CFPB's decision.

By excluding affiliated title insurance firms from within the points and fees cap, H.R. 3211 restores an incentive to overcharge homebuyers.

We know how hard it is to get people into homes. Homebuyers need to save thousands of dollars for a downpayment. So why should we make it easier to let them get overcharged as much as a thousand or more dollars on title insurance? Some say that as much as half or more of a title insurance premium goes to the referral agent. Why would we want to preserve this practice of overpricing title insurance to fund referral commissions?

At the Financial Services hearing that included this bill, I requested that we hear from independent land title agents as well as from groups like the Consumer Federation of America, the Center for Responsible Lending, Americans for Financial Reform and its 100 affiliates and the AFL-CIO.

I requested that the National Association of Independent Land Title Agents be invited to testify. I have heard concerns directly from title agents in my state that some referral sources ask to share ownership of their business. Since title insurance is based on referrals, when realtors, homebuilders and mortgage brokers refuse to provide referrals to a title agent firm, the firm may not be able to survive financially. Unfortunately, these independent unaffiliated title agents were not invited to testify nor was there another hearing on the bill.

Many organizations opposed the bill including the AFL-CIO, Alliance for a Just Society, Americans for Financial Reform, Center for Economic Justice, Center for Responsible Lending, Connecticut Fair Housing Center, Consumer Action, Consumer Federation of America, Consumers Union, Empire Justice Center, Home Defenders League, The Leadership Conference on Civil and Human Rights, NAACP, National Association of Consumer Advocates, National Association of Independent Land Title Agents, National Consumer Law Center (on behalf of its low income clients), National Council of La Raza, National Fair Housing Alliance, New Economic Project, Public Citizen, Woodstock Institute and Center for Responsible Lending.

These concerns about hidden referral commissions are not hypothetical. Last month, the Consumer Financial Protection Bureau (CFPB) fined RealtySouth, the largest real estate firm in Alabama for violations of the Real Estate Settlement and Practices Act (RESPA). RealtySouth improperly steered consumers to its affiliated firm, TitleSouth LLC. In addition, The CFPB has taken action against Borders & Borders PLC in Kentucky for funneling kickbacks to shell companies. In June, the CFPB fined Stonebridge Title Services in New Jersey for paying illegal kickbacks to referral sources.

Some who support H.R. 3211 say there are some fixed costs in lending that could result in lower valued mortgages to need to pay loans higher than the Qualified Mortgage guideline of points and fees established by smaller loans. However, the Consumer Financial Protection Bureau already provided for flexible definitions based upon the amount of a borrower's mortgage:

3 percentage cap on a loan balance at $100,000 or greater,

5 percentage cap on a loan balance from $20,000.00 to $60,000, or

8 percentage cap on loan balances of less than $12,500 \i\.

Since the average mortgage origination fees are below one percent according to the Center for Responsible Lending, the caps set by the QM are appropriate. I have not seen any compelling evidence that shows that lenders will not make loans if the title premiums charged by their affiliates are included in the points and fees cap. Lenders are free to make loans outside the ability to repay rules as well.

I have also heard the proponents of H.R. 3211 arguing that the availability of affiliate service providers helps reduce the overall cost of obtaining a mortgage loan. I question their evidence. The 2010 Harris Interactive study paid by the National Association of Realtors is suspect. In that study, more than 70 percent of buyers ``did not know'' what an affiliate service provider provided or what benefit it allegedly gave.

By contrast, in 2013, The National Association of Independent Land Title Agents (NAILTA) commissioned the first-ever national settlement preference survey of American real estate consumers.\ii\ More than 900 consumers participated in the nationwide survey. The results include:

93 percent of American real estate consumers surveyed said it was important that title insurance agents remain a neutral third party in the performance of title insurance-related services.

62 percent of American real estate consumers surveyed said that a title agency cannot remain objective if it is partially owned by a bank, real estate firm, mortgage company or homebuilder.

Only 1 percent of American real estate consumers surveyed prefer a ``one stop shop''.

For all the efficiencies that proponents assert existed prior to this new rule that provided a disincentive to refer homebuyers to controlled/affiliated title firms, settlement costs--exclusive of inflation--continue to rise. I believe the CFPB's rule could actually lower title insurance premiums and increase homeownership for Americans.

I have concerns about a market where people assert that half or more the cost of the product is a referral fee unlinked to the product itself. Consumers and independent title insurance agents say that title insurance premiums can provide renumeration to the referral source based on the capture rate such as lower desk rental fees, bonuses, gifts or higher commissions. This should not be permitted.

I urge Members to stand with homebuyers who want to understand all the fees they are charged.

I urge Members to support a market free of pressures for referral commissions.

I urge Members to vote no on H.R. 3211.

endnotes

i http://files.consumerfinance.gov/f/201401_

cfpb_ atr_qm_ small-entity-compliance-guide.pdf

ii http://origin.library.constantcontact.com/ download/get/file/1102880907824-107/Executive+Summary+10-17- 2013.pdf

Center for

Responsible Lending,

June 9, 2013.

Dear Member of Congress: We are writing to urge you to

oppose H.R. 3211. This bill reintroduces some of the higher

fees borrowers faced in the lead up to the mortgage crisis;

fees that the new mortgage rules were designed to prevent.

Specifically, this bill creates a loophole that would allow

loans with higher costs to the borrower to improperly meet

the Qualified Mortgage (QM) standard established in the Dodd-

Frank Wall Street Reform and Consumer Protection Act.

Congress should refrain from weakening the QM standard and

reject this bill.

H.R. 3211 would allow many more risky, high-cost loans to

qualify as QM loans by creating exceptions to the points and

fees threshold. These exceptions would exclude fees paid to

certain title companies affiliated with the lender. The

points and fees definition is designed to include all

compensation received by the lender. It is a reasonable

standard that provides basic protections for homebuyers.

The title insurance market is a broken market. In 2007, a

GAO report concluded that borrowers ``have little or no

influence over the price of title insurance but have little

choice but to purchase it.'' As a result, the fees are

grossly inflated--recent studies have found that between 5

and 11 cents is paid out in claims for each $1 of premiums.

Almost the entirety of a title insurance premium

(approximately 70%) goes to commissions, not insurance

coverage. In contrast, loss ratios for health insurance are

minimally 80% and ratios for auto insurance fluctuate between

50% and 70%. Borrowers already pay inflated title insurance

costs. Including affiliated title insurance fees in the QM

defined points and fees cap will not solve all the problems

in the market but the rule provides important market pressure

to control costs.

The current QM protections represent an appropriate step to

directly address recent problems for borrowers without

impacting access to credit. Creating a title insurance

loophole in the statute would eliminate one important

protection to keep costs to borrowers from escalating

further.

We welcome the opportunity to engage in a discussion for a

comprehensive fix to the flaws in the current title insurance

market. However, incentivizing an already overpriced market

to further raise rates for borrowers is no solution.

The Center for Responsible Lending urges Congress to reject

H.R. 3211--which will neither benefit consumers nor expand

access to credit.

Sincerely,

Kenneth W. Edwards,

VP, Federal Affairs.

Well, I thank the gentleman from Michigan for his leadership on title III of this package and the Mortgage Choice Act, and I appreciate the gentleman's yielding so that we can talk about why every Member of Congress should support this package of reforms.

Before I get to the substance, I do also want to thank the ranking member, thank her for voicing support for the underlying policies in this legislation. I want to thank her for expressing absolutely no concern about the substance of the policy in her remarks, and I would also like to thank the ranking member for her recognition that the Dodd-Frank law may very well have flaws, even for those who adamantly supported the passage of the bill, and for her acknowledgement that she would have no problem changing or dealing with some of the flaws of the Dodd-Frank law. Well, this is our chance, Mr. Speaker. This is the chance to deal with those flaws.

The legislation on the floor tonight is a package of four commonsense financial services bills that all share a common theme. They all have proven bipartisan support. They all have passed either the House or the Senate with unanimous or near-unanimous support, and, most importantly--put aside all of this procedure here--they all promote jobs.

They all promote durable economic growth in this country, and Members on both sides of the aisle and Members in both this Chamber and in the Senate agree about that. Let's stop the games in Washington, and let's get the American people back to work. That is what we have an opportunity to do here in a bipartisan way; so I call on my colleagues to support this bill.

This is a simple 14-page bill that is about fixing unintended consequences of the Dodd-Frank law. These fixes are technical corrections, and they are meant to clarify provisions in the law where, although congressional intent was clear, the authority provided by the statutory language led some regulators to enact or promulgate economically destructive regulations.

The four titles of this legislative package represent the hard work of a number of Members of Congress on both sides of the aisle. Let me just go through those really quickly. Title I of the legislation is an important provision that clarifies the capital requirements applied to insurance companies subject to Federal Reserve Board supervision.

Mr. Huizenga did a good job explaining what this title does; but, just in summary, it is important that the capital rules for insurance companies are carefully tailored to the business of insurance rather than arbitrarily holding insurance companies to standards that are meant for banks.

I want to thank Congressman Gary Miller, a Republican from California, Congresswoman Maloney, a Democrat from New York, for their leadership--bipartisan leadership--for this Insurance Capital Standards Clarification Act and for helping push this provision forward.

I would also like to further emphasize the bipartisan and noncontroversial nature of this title by noting that the Senate version of the Insurance Capital Standards Clarification Act passed the Senate by unanimous consent on June 3.

Then there is title II. Title II is the text of a bill that I introduced in March which passed the House by a voice vote. This was a bill that no one opposed. This was a bill that simply incorporates bipartisan provisions of the Restoring Proven Financing for American Employers Act, and it is about jobs.

It is about restoring a robust and dependable commercial lending market to U.S. companies so that they can obtain affordable financing to expand their businesses.

Collateralized loan obligations, known as CLOs, have proven to be a critical source of funding for U.S. businesses for over 20 years. Today's CLOs continue to provide $300 billion in financing to U.S. companies on Main Street, including companies that are well-known to all of us in this room: Dunkin' Donuts, American Airlines, Burger King, Toys R Us, Delta Airlines, Goodyear Tire, and even a mattress company in Lexington, Kentucky, my home district, Tempur Sealy.

Because of this innovative source of financing, U.S. employers have expanded, jobs have been created, and our economy has grown; and, despite a proven track record with a default rate below even a half a percent, this valuable form of corporate finance is under assault because of the Volcker rule.

Further relief from the Volcker rule for these CLOs is necessary to prevent a fire sale in the CLO market that will cause significant losses for banks of all size. This defined, narrow fix which clarifies that the Volcker rule should not be construed to require the divestiture of any debt securities of CLOs prior to July 21, 2017, if such CLOs were issued before January 31, 2014, is a commonsense solution.

It clarifies that a bank shall not be considered to have an ownership interest in a CLO if such debt security has no indicia of ownership other than the right to participate in the removal for cause in the selection of a replacement investment manager or investment adviser of the CLO.

This title is a bipartisan commonsense fix to a real-world problem voiced by community banks and by companies on Main Street that want access to this affordable and reliable source of commercial credit. It prevents an unnecessary fire sale in the CLO market that would cause significant losses to banks currently holding these legacy CLOs, and it will help keep the cost of borrowing affordable in the future for Main Street U.S. businesses looking to expand, grow, and create much-needed jobs.

I want to personally thank Congresswoman Maloney and Ranking Member Waters for working with me to enact a CLO fix so that it could pass by a voice vote in April.

Then, also, title III, this is the fix that Congressman Huizenga helped pass, and Congressman Huizenga worked in a bipartisan way with Congressman Meeks to support this Mortgage Choice Act, and it passed the House by a voice vote--not a single objection--on June 19, and I won't go over the details which Congressman Huizenga has done well, but I will say that this measure will greatly advance our efforts to help the housing market and our economy recover as Members on both sides of the aisle have demonstrated with their support and supporting it by voice vote.

Finally, title IV, this is the fourth and final title of this package, and it is a provision that has broad support for Main Street and businesses of all sizes. Like other provisions of this package, title IV is meant to alleviate the unintended consequences created by Dodd-Frank. It is a technical fix that has proven bipartisan support and passed the House on June 12 with 411 votes in favor.

The provision simply clarifies and codifies congressional intent that Dodd-Frank was not supposed to impose margin requirements on end user derivative transactions. We are talking about nonfinancial companies that produce goods for the American people and simply use derivatives to hedge against commercial risk.

This provision is not about speculation. It is about promoting responsible risk-management practices among U.S. companies. In fact, failure to enact this provision could lead to more risk as companies may be deterred from engaging in hedging transactions.

It requires them to needlessly tie up capital that could otherwise be used to do more productive things like expand operating plants, perform research and product development, and ultimately create jobs. Again, this is a provision that previously passed the House with near unanimous support.

In conclusion, Mr. Speaker, what do we have here today? We have a package of four bills, 14 pages, unlike the 2,300 pages in Dodd-Frank-- 14 pages, each of which of these four bills--overwhelmingly bipartisan--each of which are vital to preserving and creating jobs, each of which are noncontroversial in nature, and two of these provisions previously passed the House by voice vote, a third passed with 411 votes, and the fourth is a commonsense critically important solution for the 75 million American families that rely on life insurance for financial and retirement security, a bill that passed the Senate by unanimous consent.

The substance and the policy behind these bills are bipartisan. It is solid. I would certainly expect that, if you would support the underlying policy, then you would support this commonsense package of bills to promote jobs and durable economic growth.

Mr. Speaker, I thank the gentleman, and I thank the gentlewoman for her comments. I appreciate what she is saying about bipartisanship. Let me just make sure I clarify. I was referring to Congresswoman Maloney on the legislation that she and I worked on together, the CLO bill. So, in a very bipartisan way, I worked with her on that.

But to the substance of the gentlewoman's remarks, I appreciate what she is saying, absolutely, and that is what is such a shame about this whole situation because we have four bills that have been worked on in a bipartisan way. There shouldn't be any controversy about this whatsoever.

Let's do the business of the American people, get them back to work. Pass these bipartisan bills.

Just for the record, when my colleague was speaking, my name is Carolyn McCarthy, not Carolyn Maloney, just so we clarify that, and I want to thank Ms. Waters. I want to thank the ranking member on Financial Services.

I have a speech here, but I need to clarify a few things. I am not sure, my memory has not been good since I was sick, but I was on Financial Services when we did Dodd-Frank, and we worked very hard, bipartisanly, on that committee, and we saw the problems on some of the language, and we corrected them bipartisanly.

We made sure that when we were dealing with derivatives, that it didn't have the language that you are complaining about. That came from the Senate side.

When we are talking about the insurance companies and making it easier to make sure they could do their job and not be treated like a bank, we got the language here on the House side. Again, the Senate side misinterprets some and had the wrong language. Gary Miller and I have been working a year--over a year--to make the corrections that are coming out today.

Now, I support everything that we are going to be voting on, but I am reluctant about it because talking to my colleagues on the Senate side, they have said that they will not do it; so something that you all want has a really good chance of never seeing the light of day. Maybe next year. That is fine. Whom are you hurting, and what are you proving? Mainly because, now, the insurance companies are going to be in limbo. We don't know what is going to happen; so you are putting off something again.

I am ending my career here in Congress. I will be retiring, and I have to say, for 18 years, I have worked bipartisanly, and I have gotten a lot of things done, and I hope to continue to get some things done between now and when I retire, but I also think what I have seen here is this politicking that words are said and people don't get to know each other.

Now, the audience might not understand everything that is going on here on the floor, but I do believe that what we have done on Dodd- Frank--and, now, yes, there are technical changes; but, to be very honest with you, in 18 years, I do not remember any bill--major bill-- being passed here, going through the Senate, that didn't come back for technical changes.

We are not perfect. As many times as people want to think we are, we are not. We are human beings; and, unfortunately, we do not take the time to legislate and to work things out as we have done in the past. I am not blaming Republicans, and I am not blaming Democrats.

We have got good people on both sides of the aisle, and it hurts me terribly to see this going on when everybody should be working together for the country, not whether you are a Republican or a Democrat.

There are many of us who care very much about getting jobs. There are many of us that care to get everybody forward, and I think that is something that people have to start realizing. We have so many members on your side of the aisle and members on our side of the aisle that have been friends for

years and years, and you have got to learn to work together. You can have your opinions, and we have ours, but you have got to sit down and work together.

I know the big word around here is don't compromise. It is not compromising. It is trying to represent all of our constituents for the whole country.

And Ms. Waters is absolutely right. She worked very hard during Dodd- Frank, as many of your Republican colleagues did. But it was Gary Miller and I who have been working with the Senate for over a year and to see this bill come onto the floor, which is going to pass, and it will pass. What upsets me is it is not going to go anywhere in the Senate. Another bill will die. And there is no reason for it. 204 Members bipartisanly want to see the Capital Standards Clarification Act of 2014 passed.

I understand where you want to put everything together so you see it is efficient. Sometimes you have to know how the Senate works so that we can be efficient and work with them as we go forward because, if had you done that, you would hear Republicans and Democrats in the Senate and their aides who are saying, This is not the way it is done. That is why we are upset.

When you have so many people working on this, many of your colleagues, my colleagues signing on to having it done, and now we are going to see, most likely, it die or put off until next year, which is really a shame because the companies you are talking about, everything you are talking about as far as the jobs bills and everything else like that, I would like to see that signed by the President tomorrow. That ain't going to happen now, and it is not going to happen now.

So what I will say is Ms. Waters is correct, but I will vote for this bill tomorrow. Many of my colleagues will vote for this bill tomorrow because we are hoping we will go forward. But in my heart of hearts, because I have been around here too long, I don't think the Senate is going to pass it, and that is a shame because that is what you are working for. That is what we are working for. But the Senate's procedures do not do it.

They will take a stand-alone bill. And from what I understand, Mr. Miller and I will hopefully introduce a stand-alone bill in the next few days, because if this dies in the Senate, we will take up the Senate bill, which is our bill, and hopefully get a vote here and have the President sign it within a few days.

Mr. Speaker, tonight the House is considering the Insurance Capital Standards Clarification Act of 2014 under suspension of the rules.

This bill contains four Financial Services Bills including S. 2270.

I am pleased to be the lead democrat on H.R. 4510, the House companion to S. 2270, the Insurance Capital Standards Clarification Act of 2014. However, this is not the same bill that we will be voting on.

Though I will reluctantly support the bill, I am disappointed in the process and believe that S. 2270 should have been brought up as a stand-alone bill, rather than combined with three other bills which have already passed the House. The Senate has indicated they would need to start all over if changes were made to the original bill.

Ranking Member Waters rightly objected to this procedure last week yet her concerns were ignored.

S. 2270 supports a more precise application of capital standards that furthers the interests of strong prudential supervision. This legislation grants the Federal Reserve the appropriate flexibility to apply accurate capital standards for insurers. This bill will help keep insurance products affordable and available by ensuring the correct capital standards are applied to insurance companies that fall under the supervision of the Federal Reserve.

This House version already has 204 bipartisan cosponsors and S. 2270 would easily pass under suspension. This bill has already passed the Senate by unanimous consent. Passing S. 2270 on its own in the House would have sent the bill directly to the president's desk.

Instead, the Financial Services committee majority leadership has insisted on combining four bills and using our title, even though this is different legislation. This creates uncertainty as to the future of the original bill.

I will support the Insurance Capital Standards Clarification Act of 2014 on the floor tonight and urge my colleagues to do the same. However, I am disappointed in the process that has been used. Had S. 2270 been passed as a stand-alone bill, it would have been sent directly to the President's desk. Instead, we will likely have to vote on S. 2270 as a stand-alone bill during the lame duck session, which is already filled with a long list of remaining actions.

The House delay in passing this bill is causing uncertainty for insurance companies who cannot plan for the future of their businesses without knowing the appropriate capital standards. I encourage my colleagues to cosponsor H.R. 4510, the House version of S. 2270, so that we can reach 218 cosponsors and bring this to the floor.

What I was trying to explain to you, it is not that we are giving up our power from here to the Senate. The Senate will not accept everything as a package because they have to change all their language, and that is not going to happen.

They will send back here a stand-alone bill, probably pass the other package--that is fine--but they are not going to change or open it up. That is what I meant to tell you, that you have to understand how the Senate works, and the House is totally different. That is all I am saying, and that is why this bill might die, unfortunately, over in the Senate, because they are not going to get to it because, let's face it, we have too much to do between now and when we come back for a lameduck session.

Mr. Speaker, I oppose The Insurance Capital Standards Clarification Act of 2014 (H.R. 5461). While I support efforts to provide flexibility under the Dodd-Frank Act's Collins amendment by explicitly stating that regulators are not required to apply minimum leverage capital and risk-based capital requirements to firms with state-regulated insurance operations, this bill does more than that. It contains The Mortgage Choice Act of 2013, (H.R. 3211).

Mr. Speaker, as I stated during the hearing and the mark up on The Mortgage Choice Act of 2013 (H.R. 3211), there are serious concerns about steering consumers into buying title insurance with hidden commissions and inflated costs.

I bought two homes in my life. Like most homebuyers, I was asked to sign a bunch of papers with lots of fees such as origination charges, appraisal fees, scoring fees, recording charges, tax service fee and title insurance. Like most consumers, I chose my title insurance provider based on referral: I did not comparison shop.

For most of us, title insurance is the most expensive of the closing cost fees--sometimes running in the thousands of dollars. These fees are poorly understood by homebuyers. This can lead to paying higher fees than is necessary or appropriate.

When Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, we required the newly created Consumer Financial Protection Bureau (CFPB) to do a better job at protecting consumers when buying a home.

We know that the housing finance system had too much predatory and discriminatory lending. African Americans and Latinos were frequently charged much higher interest rates than they qualified for. Homeowners were refinanced into high fee and interest rates they could not afford. The result was more than five million foreclosures and a colossal loss of wealth.

In response to the new law, the CFPB wrote rules to protect people buying homes from products which would strip their wealth. One of those rules defined a Qualified Mortgage (QM) standard which was established in Dodd-Frank. As part of that QM standard, the CFPB established a ``points and fees'' bright line limit for mortgages that qualified under the Ability to Repay provision.

The CFPB established a limit on ``points and fees''--which account for a loan's origination costs--that exceed 3 percent of the loan amount--although it can be up to 8 percent for lower cost homes. Because of concerns that the affiliated title insurance system was leading to higher costs for borrowers in a market based on reverse competition, the CFPB wisely chose to require title insurance charges from affiliated title agents be within the points and fees cap.

H.R. 3211 reverses the CFPB's decision.

By excluding affiliated title insurance firms from within the points and fees cap, H.R. 3211 restores an incentive to overcharge homebuyers.

We know how hard it is to get people into homes. Homebuyers need to save thousands of dollars for a downpayment. So why should we make it easier to let them get overcharged as much as a thousand or more dollars on title insurance? Some say that as much as half or more of a title insurance premium goes to the referral agent. Why would we want to preserve this practice of overpricing title insurance to fund referral commissions?

At the Financial Services hearing that included this bill, I requested that we hear from

independent land title agents as well as from groups like the Consumer Federation of America, the Center for Responsible Lending, Americans for Financial Reform and its 100 affiliates and the AFL-CIO.

I requested that the National Association of Independent Land Title Agents be invited to testify. I have heard concerns directly from title agents in my state that some referral sources ask to share ownership of their business. Since title insurance is based on referrals, when realtors, homebuilders and mortgage brokers refuse to provide referrals to a title agent firm, the firm may not be able to survive financially. Unfortunately, these independent unaffiliated title agents were not invited to testify nor was there another hearing on the bill.

Many organizations opposed the bill including the AFL-CIO, Alliance for a Just Society, Americans for Financial Reform, Center for Economic Justice, Center for Responsible Lending, Connecticut Fair Housing Center, Consumer Action, Consumer Federation of America, Consumers Union, Empire Justice Center, Home Defenders League, The Leadership Conference on Civil and Human Rights, NAACP, National Association of Consumer Advocates, National Association of Independent Land Title Agents, National Consumer Law Center (on behalf of its low income clients), National Council of La Raza, National Fair Housing Alliance, New Economic Project, Public Citizen, Woodstock Institute and Center for Responsible Lending.

These concerns about hidden referral commissions are not hypothetical. Last month, the Consumer Financial Protection Bureau (CFPB) fined RealtySouth, the largest real estate firm in Alabama for violations of the Real Estate Settlement and Practices Act (RESPA). RealtySouth improperly steered consumers to its affiliated firm, TitleSouth LLC. In addition, The CFPB has taken action against Borders & Borders PLC in Kentucky for funneling kickbacks to shell companies. In June, the CFPB fined Stonebridge Title Services in New Jersey for paying illegal kickbacks to referral sources.

Some who support H.R. 3211 say there are some fixed costs in lending that could result in lower valued mortgages to need to pay loans higher than the Qualified Mortgage guideline of points and fees established by smaller loans. However, the Consumer Financial Protection Bureau already provided for flexible definitions based upon the amount of a borrower's mortgage:

3 percentage cap on a loan balance at $100,000 or greater, 5 percentage cap on a loan balance from $20,000.00 to $60,000, or 8 percentage cap on loan balances of less than $12,500.

Since the average mortgage origination fees are below one percent according to the Center for Responsible Lending, the caps set by the QM are appropriate. I have not seen any compelling evidence that shows that lenders will not make loans if the title premiums charged by their affiliates are included in the points and fees cap. Lenders are free to make loans outside the ability to repay rules as well.

I have also heard the proponents of H.R. 3211 arguing that the availability of affiliate service providers helps reduce the overall cost of obtaining a mortgage loan. I question their evidence. The 2010 Harris Interactive study paid by the National Association of Realtors is suspect. In that study, more than 70% of buyers ``did not know'' what an affiliate service provider provided or what benefit it allegedly gave.

By contrast, in 2013, The National Association of Independent Land Title Agents (NAILTA) commissioned the first-ever national settlement preference survey of American real estate consumers. More than 900 consumers participated in the nationwide survey. The results include:

93% of American real estate consumers surveyed said it was important that title insurance agents remain a neutral third party in the performance of title insurance-related services.

62% of American real estate consumers surveyed said that a title agency cannot remain objective if it is partially owned by a bank, real estate firm, mortgage company or homebuilder.

Only 1% of American real estate consumers surveyed prefer a ``one stop shop''.

For all the efficiencies that proponents assert existed prior to this new rule that provided a disincentive to refer homebuyers to controlled/affiliated title firms, settlement costs--exclusive of inflation--continue to rise. I believe the CFPB's rule could actually lower title insurance premiums and increase homeownership for Americans.

I have concerns about a market where people assert that half or more the cost of the product is a referral fee unlinked to the product itself Consumers and independent title insurance agents say that title insurance premiums can provide remuneration to the referral source based on the capture rate such as lower desk rental fees, bonuses, gifts or higher commissions. This should not be permitted.

I urge members to stand with homebuyers who want to understand all the fees they are charged.

I urge members to support a market free of pressures for referral commissions.